NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7689A
SPONSOR: Rosenthal L
TITLE OF BILL: An act to amend the mental hygiene law, in relation to
prohibited practices by providers of substance use disorder services
PURPOSE OR GENERAL IDEA OF BILL:
This bill would prohibit the practice of substance use disorder patient
brokering in New York.
SUMMARY OF PROVISIONS:
Section 1 would create a new Mental Hygiene L. § 32.06 to prohibit any
individual, addiction professional, credentialed professional, health
care provider, health care facility or substance abuse program from
giving or receiving a commission, bonus, rebate, or kickback, directly
or indirectly, to induce the referral of a potential service recipient
in connection with the performance of substance abuse services. This
section establishes any violation of this section will constitute a
Sections 2 would make this bill effective immediately.
The heroin and opioid epidemic has devastated families across New York
State. Overdose deaths from heroin, fentanyl, car-fentanyl, and other
synthetic iterations have skyrocketed and families are desperate to get
care for their loved ones.
However, there has also been a corresponding rise in individuals who
aggressively pursue people in need of substance use disorder treatment
services and, for a sometimes extravagant fee, promise admission to
treatment programs. For individuals engaging in this predatory behavior,
the most desirable patients are those with robust insurance coverage,
and out of network benefit packages. Patient brokers refer these clients
to programs offering the highest rate of "return" to the patient broker,
with little or no regard for the patient's specific needs.
This predatory practice should be prohibited because it capitalizes on,
and exploits, families' fears while putting patients at risk of inappro-
priate treatment. This bill would make it a crime to offer to or accept
any kickback from an individual or entity that provides substance abuse
services in exchange for patient referral and admission.
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
The bill would take effect 60 days after it shall become law.
STATE OF NEW YORK
2017-2018 Regular Sessions
May 9, 2017
Introduced by M. of A. L. ROSENTHAL, D'URSO, THIELE, SKOUFIS, CUSICK --
read once and referred to the Committee on Alcoholism and Drug Abuse
-- reported and referred to the Committee on Codes -- recommitted to
the Committee on Codes in accordance with Assembly Rule 3, sec. 2 --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the mental hygiene law, in relation to prohibited prac-
tices by providers of substance use disorder services
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The mental hygiene law is amended by adding a new section
2 32.06 to read as follows:
3 § 32.06 Prohibited practices by providers of substance use disorder
5 1. For purposes of this section, unless the context clearly requires
6 otherwise, "provider" shall mean any person, firm, partnership, group,
7 practice association, fiduciary, employer, representative thereof or any
8 other entity who is providing or purporting to provide substance use
9 disorder services. Provided, however, that "provider" shall not include
10 a person receiving substance use disorder services from the provider.
11 2. No provider shall intentionally solicit, receive, accept or agree
12 to receive or accept any payment, benefit or other consideration in any
13 form to the extent such payment, benefit or other consideration is given
14 for the referral of a person as a potential patient for substance use
15 disorder services.
16 3. No provider providing or purporting to provide substance use disor-
17 der services pursuant to this chapter, shall intentionally make, offer,
18 give, or agree to make, offer, or give any payment, benefit or other
19 consideration in any form to the extent such payment, benefit or other
20 consideration is given for the referral of a person as a potential
21 patient for substance use disorder services.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
A. 7689--A 2
1 4. This section shall not apply to any:
2 (a) lawful payments by a health maintenance organization or health
3 insurer, operating in accordance with article thirty-two or forty-three
4 of the insurance law or article forty-four of the public health law on
5 behalf of their enrollees for such substance use disorder services or
6 other benefits required to be provided;
7 (b) lawful payments to or by a provider to a health maintenance organ-
8 ization or health insurer operating in accordance with article thirty-
9 two or forty-three of the insurance law or article forty-four of the
10 public health law, as payment for services provided, a refund for an
11 overpayment, a participating provider fee, or any similar remuneration;
12 (c) provider for an activity that, at the time of such activity, would
13 have been lawful as specifically exempt, or otherwise not prohibited,
14 under any federal statute or regulations, including but not limited to
15 42 U.S.C. § 1320a-7b (b) or the regulations promulgated thereunder, if
16 conducted by a person, firm, partnership, group, practice, association,
17 fiduciary, employer representative thereof or any other entity providing
18 substance use disorder services;
19 (d) any employee or representative of a provider who is conducting
20 marketing activities, where the employee or representative identifies
21 the provider represented or for whom or which the employee or represen-
22 tative works, identifies that the employee or representative is a mark-
23 eter and not a clinician or other individual who can provide diagnostic,
24 counseling or assessment services, and such marketing activities are
25 limited to educating the potential patient about the program with no
26 effort to steer or lead the potential patient to select or consider
27 selection of the substance use disorder services provider represented or
28 for whom or which the employee or representative works; or
29 (e) commissions, fees or other remuneration lawfully paid to insurance
30 agents as provided under the insurance law.
31 5. Any provider who intentionally violates the provisions of subdivi-
32 sion two or three of this section shall be guilty of a misdemeanor as
33 defined in the penal law.
34 6. If the commissioner has reason to believe a provider has violated
35 subdivision two or three of this section, the commissioner may proceed
36 to investigate and institute enforcement actions, as may be authorized
37 pursuant to the applicable provisions of this article.
38 7. The provisions of this section are in addition to any other civil,
39 administrative or criminal enforcement actions provided by law. Penal-
40 ties authorized under this section may be imposed against corporate
41 providers and individual providers.
42 8. The commissioner shall adopt and may amend rules and regulations to
43 effectuate the provisions of this section.
44 § 2. This act shall take effect on the sixtieth day after it shall
45 have become a law.